ICICI Bank says no exposure to US sub-prime credit

Mumbai, Mar 4 (UNI) Largest Indian private sector Bank ICICI Bank today asserted that it has no material, direct or indirect, exposure to US sub-prime credit.

In a statement here the Bank said, ''The widening of credit spreads in the international markets have resulted in a negative mark-to-market impact on the credit derivatives and fixed income investment portfolios of the Bank and its overseas banking subsidiaries, while there has been no significant deterioration in actual credit quality of the underlying investments.'' The Bank's scrip, meanwhile, shed 5.22 per cent to close at Rs 971.10.

ICICI Bank and its overseas banking subsidiaries have an aggregate exposure of USD 2.2 billion in credit derivatives. As of January 31, 2008, the mark-to-market negative on this portfolio due to movement of credit spreads was about USD 155 million of which USD 88 million had been provided for in the financial statements of the bank and its subsidiaries for the nine months ended December 31, 2007, the Bank said.

ICICI Joint Managing Director Chanda Kochhar ealier told a television channel, ''We do not have a direct exposure to any of the subprime assets.'' ''These are essentially Indian corporates.

But instead of holding them as loans, we are holding them as investment structures,'' she added.

The immediate reaction of the Bank was a remark in the Parliament by Union Minister of State for Finance P K Bansal that the Bank had reported a mark-to-market loss of USD 264.34 million as on January 31 due to exposure to credit derivatives and investments in overseas markets following the subprime crisis.

The Bank said along with its overseas banking subsidiaries, it had fixed income investment portfolios which have a mark-to-market negative due to widening of credit spreads. As of January 31, 2008, this negative was about USD 108 million of which USD 101 million had been accounted for in the financial statements as of December 31,2007. This includes mark-to-market on the available for sale portfolio which has been accounted for in the shareholders' equity.

It may be noted that unrealised gains on ICICI Bank's other investment portfolio has not been considered in the above, the bank added.